MANILA - The government is considering a $250-500 million dollar-denominated bond issue this year in addition to yen bonds to help fund typhoon relief efforts and next year’s budget deficit, a top official said.

Officials have previously said Manila was considering a third dollar bond issue this year, yen bonds and more domestic debt to fund a budget deficit that may rise to a record P260 billion, P10 billion above target.

Finance Secretary Margarito B. Teves told reporters late on Friday the size of the new issue had yet to be determined although initial discussions ranged between $250 million and $500 million.

Lawmakers are working on a P10-billion supplementary budget for 2009 after massive flooding in and around Manila more than a week ago due to tropical storm Ondoy.

Asked if both the dollar and the earlier planned Samurai bond would be sold this year, Mr. Teves said: "It’s possible."

"For Samurai, we are contemplating [to issue] $500 million this year, and $500 million next year.

"What is important is that the features of the Samurai bond should be comparable with the global [dollar] bond."

One of the most active debt issuers in Asia, the Philippines has secured a guarantee from the Japan Bank for International Cooperation to sell up to $1 billion worth of yen bonds. Officials said earlier proceeds from the yen issue will likely go to funding next year’s budget.

Manila has raised $2.25 billion from the sale of dollar bonds this year, with the last sale of $750 million done in July.

Mr. Teves said it may be good to raise funds now because "the market is liquid and interest rates are low."

"The opportunity is there, but it’s a question of timing. It’s a very dynamic situation," he added. — Reuters